Tesla has earned an 864,885-square meter plot in Shanghai’s Lingang area for the moving car maker’s new factory — the company’s first outside the U.S.
The local subsidiary of Elon Musk’s troop bought the industrial-use land for 973 million yuan, or $140 million, on Wednesday, contract to China property transaction records from Shanghai-based financial figures company Wind Info.
The planned facility’s floor space whim be 1.7 million square meters, the database showed.
Government standard stipulates that all industrial-use land purchases are effectively 50-year subleases that can potentially be renewed.
Plans for Tesla’s wholly-owned Shanghai plant were first announced in July. Lingang is located on the coast, there 47 miles southeast of the center of Shanghai or a roughly two-hour underground railway ride. Several auto manufacturers with foreign ties pull someones leg facilities there, and unmarked test vehicles can be seen roaming the ways.
Tesla expects the factory to produce its first cars in three years, concurring to an earnings release in August. The facility will initially have volume for about 250,000 vehicles and battery packs a year, and plans to at the end of the day double that, the release said.
Funding will mostly draw near from local debt, and Tesla’s own investment “will not start in any outstanding way until 2019,” the company said in the August release.
Producing motor cars in China, the world’s largest market for electric vehicles, would significantly downgrade costs for Tesla.
The company noted in an Oct. 2 report it cannot access the selfsame cash incentives as local Chinese manufacturers, and overall ocean delight costs and tariffs mean the automaker is operating at a 55 percent to 60 percent price disadvantage compared with a domestic equivalent.
Shanghai-based Nio, nicknamed the “Tesla of China,” went public in the U.S. in September and suggested earlier this week it beat its own fiscal third quarter opus target by several hundred vehicles. Baillie Gifford, Tesla’s largest maximum investor, disclosed earlier this month an 11.4 percent put money on in Nio.
—CNBC’s Robert Ferris contributed to this report.
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